Less work and fewer original podcast shows available to users. Digital platform Spotify said it will lay off 17% of its global workforce. This is the third series of cuts in 2023 for the audio products giant, justified by the need to cut costs in a less favorable economic context. “Economic growth has slowed significantly and capital has become more expensive,” Spotify CEO Daniel Ek said in a blog post. “Spotify is no exception to these facts,” Ek said.
Openness
According to Bloomberg, a person familiar with the situation who requested anonymity because he was not authorized to speak publicly on the matter said that 1,500 people would be affected by the layoffs and many of the company’s offices would also be affected. “More people need to focus on outcomes for our key stakeholders: creators and consumers,” Ek said. According to the CEO, there will be further staff reductions in 2024 and 2025, but the impact will be less. “Given the difference between our financial goal and our current operating costs, I decided that significant steps to reduce our costs were the best option to achieve our goals,” Ek said.
backtracking
Spotify had invested in expanding its team in recent years, taking advantage of low interest rates. Those hired were involved in marketing and curating content. The company opened a new office in Los Angeles in 2021, which can accommodate up to 600 employees. This location should be among the locations affected by the outages. The audio platform began investing heavily in podcasting a few years ago, acquiring companies such as Parcast, Gimlet and Ringer. The goal was to create a structured production for the streaming service’s expansion into audio storytelling. As part of this strategy, Spotify has signed deals with prominent journalists, including the Obamas’ production company Higher Ground, and popular podcasters such as Joe Rogan. However, Spotify did not renew the deals that had expired in the meantime, including Higher Ground.
Italian podcasts
Even in Italy, the audio platform has invested in special productions. For example, we remember “Bello Mondo,” a podcast dedicated to the environmental emergency curated by science communicators and climate scientists. In the field of culture, we remember “La libraria cartabile”, which focuses on literature and is edited by the bookseller Cristina Di Canio. There is also the historical and documentary podcast “Qui si fa l’Italia”, edited by Lorenzo Pregliasco and Lorenzo Baravalle, which tells the history of Italy and Italian politics. It is not yet known whether there will be an outage in our country and which productions it will concern.
A series of interruptions
Despite the platform’s growth last year, the environment has changed and further “rationalization” is needed, according to the company. The costs would increase dramatically compared to the revenue from subscriptions and advertising. As of January, Spotify had laid off 6% of its staff and laid off 600 people. These cuts were followed by further cuts in June, when the company reduced its staff by a further 200 people. As of October 2022, 40 podcast staff have been laid off, resulting in the elimination of 11 podcasts. Still, the Swedish company has assured that it will continue to invest in original programs. “We’re still committed to investing and making bold bets, but now we’re ensuring Spotify’s continued profitability and ability to innovate with a more targeted approach,” Ek wrote. Following the announcement, Spotify shares rose more than 7% to close at $194.17 per share on Monday, December 4.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
